New Delhi, July 25
The liquidity squeeze due to recent steps taken by the RBI will delay economic recovery and add to corporate India’s challenges, says a report by Crisil Research.

Roopa Kudva, managing director and CEO, Crisil, said: “Credit quality of corporates is likely to be weakened by slow growth in GDP, heightened currency volatility, and higher-than-expected interest rates. Specifically, stress will increase in sectors such as power, construction, engineering, and steel, and lead to higher non-performing assets (NPAs) in the banking system.”

As per the report, India’s economic recovery will take longer than previously expected. Crisil has lowered India’s GDP forecast for 2013-14 by 50 basis points to 5.5 per cent, given the reduced likelihood of interest rate cuts and weak momentum in both industry and services.

In contrast with 2009, the global environment is much more stable today, and challenges for India’s economy are mainly domestic. Industrial growth plummeted to a 20-year low of 1 per cent in 2012-13, growth in private demand slowed down to a 12-year low of 4 per cent, and private corporate investment continues to be weak.

RBI’s recent measures have halted the declining interest rate cycle and tightened systemic liquidity. Crisil Research expects demand in the rate-sensitive sectors to remain under pressure. Slower income growth and higher rates and fuel prices will impact automobile sales.

Car sales are expected to decline by 2 to 3 per cent and medium and heavy commercial vehicle (MHCV) sales to decline by 1 to 3 per cent in 2013-14. It has also lowered growth in new home sales by 400 bps, and volume growth for steel and cement by about 100 bps.

Crisil expects credit quality pressures on corporates to continue, given the difficult environment. The pressure will be greater on firms with higher leverage and longer working capital cycles. In addition, refinancing pressures will increase for corporates on account of weak systemic liquidity.

An analysis of the liquidity of 11,500 firms indicates that cash accruals will be sufficient to service only two-thirds of the firms’ maturing term debt of Rs 1.1 trillion in 2013-14. Corporates will find it challenging to refinance the remaining one-third, given the tight systemic liquidity. Rating downgrades may, therefore, outnumber upgrades in the near term. Banks’ NPAs are likely to increase to around 4 per cent of advances by end-March 2014 from 3.3 per cent a year ago.

New Delhi, July 25
Country's largest car-maker Maruti Suzuki India today reported a 49 per cent jump in net profit at Rs 631.6 crore for the first quarter ended June 30, 2013.

However, net sales during the quarter under review stood at Rs 9,995.12 crore as against Rs 10,529.24 crore in the same period a year ago, the company said.

New Delhi, July 25
Reliance ADAG chairman Anil Ambani does not have to appear in the 2G scam trial court tomorrow. Special CBI judge OP Saini today exempted him from personal appearance till August 15 as he pleaded that he had pre-scheduled and pre-committed business engagements.

The special judge had, on July 22, asked Anil Ambani to appear before him on July 26 and depose as a prosecution witness. Earlier, the court had also summoned his wife Tina Ambani for the same purpose but the date for her appearance has not been decided yet.

Meanwhile, the Supreme Court today agreed to hear on July 29 a petition filed by Reliance Telecom Ltd (RTL) challenging the summons issued to additional witnesses in the 2G scam case. Without naming Anil or his wife, the petition said summoning additional witnesses at the instance of the CBI when the trial was at the closing stage would not be of any help and would rather delay the adjudication of the case.

RTL said the CBI had not offered any explanation for not mentioning the additional witnesses in the chargesheet filed 20 months ago or its delay in pleading for their examination as essential witnesses now.

It has come to the SC bypassing the Delhi High Court as the apex court has directed that 2G scam cases should be heard only by the special trial court or the Supreme Court.

New Delhi, July 25
India's largest realty firm DLF will exit from life insurance business by selling 74 per cent stake in its joint venture DLF Pramerica Life Insurance to Dewan Housing Finance, reportedly fo r over Rs 350 crore.

DLF had in 2007 announced entry into the life insurance business through a joint venture with US insurance giant Prudential Financial's arm.

The joint venture, where the Indian realty firm held 74 per cent in the joint venture and the rest was owned by Prudential International Insurance 26 per cent, had reported a combined loss of over Rs 250 crore during the past two fiscals.

"...the company today signed definitive agreements to sell its 74 per cent stake in the life insurance joint venture DLF Pramerica Life Insurance...to Dewan Housing Finance and its group entities," DLF said in a filing to the BSE.

Neither of the companies, however, disclosed the value of the deal but sources said it could be worth Rs 350-400 crore. — PTI

New Delhi, July 25
Prices of both the precious metals, gold and silver, tumbled in the national capital today on heavy sell-off by stockists in tandem with a sharp fall in global markets.

While gold plunged by Rs 510 to Rs 27,820 per 10 grams, silver lost Rs 755 to Rs 41,225 per kg on poor offtake by jewellers and industrial units.

Traders said the sentiment dampened following a steep fall in gold prices in overseas markets on signs of economic recovery as sales of new US homes in June rose to a five-year high, mainly kept pressure on the precious metals.

Gold in New York, which normally sets the price trend on the domestic front, fell by 1.1 per cent to $1,320.30 an ounce, the biggest drop since July 5 and silver 1.2 per cent to $20.02 an ounce last night.

In addition, sluggish demand at prevailing higher levels further influenced the trading sentiment.

Sirsa, July 25
The small enterprises manufacturing one particular kind of commodity can now look forward to making their goods on modern and updated version of machinery without incurring costs for setting up new units.

Under a Central Government project, all such entrepreneurs would be brought under one umbrella and provided with state-of-the-art manufacturing facilities without much cost.

The authorities in Sirsa have initiated the process of setting up a hosiery cluster at Darbi village, where nearly 120 people of the village will group together to form a cluster.

“During our surveys for the project, we found that a number of families in Darbi village are involved in preparing clothes for winters. We have decided to form a hosiery cluster of these families,” said J Ganesan, Deputy Commissioner, Sirsa.

Under the cluster development scheme, the cluster members will pool funds for the purchase of land and the district administration will spend Rs 60 lakh on the construction of building from the Backward Region Grant Fund (BRGF), a scheme for correcting regional disparities in the backward districts. Sirsa and Mahendergarh are the two districts of Haryana which are getting funds under the BRGF scheme.

“Once the building is constructed, the Ministry of Micro, Small and Medium Enterprises (MSME) of the Central Government will spend Rs 4 to 5 crore on the state-of-the-art machinery in the building,” Ganesan explained.

A decade ago, two persons had started the hosiery business in Darbi village.

Gradually, some others also joined the trade and now there are several families in the village making clothes for winters. “All beneficiaries of the scheme belong to the Scheduled Caste and the Backward Caste and it is the first group of its kind in the region,” he said.

Ganesan said the authorities also had another cluster of ‘jutti’ (desi shoes) manufacturers, who are in good numbers in Rania and Ellenabad, but for now, the process for a hosiery cluster has been started.

New Delhi, July 25
At a time when car manufacturers are seeing their worst sales ever, the government has provided some relief to some of them as it clarified that 30 per cent excise duty for big cars, as announced in the Union Budget this year, was only for certain models.

The Revenue Department in a notification today clarified that Maruti SX4 and Toyota Corolla Altis will attract lower excise duty of 27 per cent and not 30 per cent prescribed for SUVs.

There had been confusion following the announcement in the Budget and it was not clear whether the 30 per cent excise duty would be levied on the large sedans as well.

The clarification issued by the Central Board of Excise and Customs (CBEC) clarified that the 30 per cent excise would be applicable to Sports Utility Vehicle (SUVs) only and not to the large sedans. The large sedans will attract 27 per cent duty.

The CBEC in the circular said, “It is clarified that the afore-cited motor vehicles (Maruti SX4, Honda Civic and Toyota Corolla Altis), which are known as sedans, will attract the excise duty of 27 per cent as applicable to large segment cars”.

The clarification was sought by car makers as several large sedans had similar technical specifications as that of the SUVs.

While increasing the excise duty on SUVs to 30 per cent in the Budget, the government had defined three features — engine capacity of over 1,500 cc, length more than 4,000 mm and ground clearance of 170 mm and above — that would attract the duty.

BRIEFLY

Connect ties up with Huawei
Chandigarh: To provide best-in-class services to its enterprise customers, Connect has tied up with networking and telecom equipment giant Huawei to bring a wide range of solutions to its customers across Punjab and the Tricity. — TNS

AG-Haryana online portal
Chandigarh: The office of the Principal Accountant-General, Haryana, has set up an online grievance redressal portal for the Haryana Government employees and retirees. It will send SMS alerts and email responses to the complaints lodged online. Provident fund status and loan accounts of all employees would also be updated on the portal. — TNS